Nerierose Maralit
2018071251
1.
International Business and Trade
Sec2-MN
What is the current global position of Bangladesh's textile and garment industry?
At present, Bangladesh ranks as the world’s second largest Readymade Garment (RMG)
exporter, just behind China. Country’s 81% of exports come from the RMG sector, and the
textile and Apparel sector contributes around 20% to Bangladesh’s GDP. It employs around 20
million people in the country and is the major driving force of the country’s economy
(Stitchdiary. (2018, July 18). What makes Bangladesh — A hub of garment manufacturing?). On
today's trends, Bangladesh's garment exports will soon overtake those of its giant neighbour,
India.
2.
How can it be explained?
In 2006, it sent clothes worth $8.9 billion to rich countries and up to $10.3 billion in
2010. Revenues from the garment trade account for about 80% of all exports and are double the
remittances sent home by Bangladeshis working overseas—the economy's other pillar. When the
recession hit developed nations in 2008, big importers like WalMart in fact increased their
imports to better serve their customers. The country has plenty of resources, opportunities, and
beneficial government policies. In Bangladesh large number of labor workers can be found.
Also, natural gas and cost of energy is cheap. With huge population, labor is abundant, and it has
also an advantage in producing labor intensive products. The minimum wage in Bangladesh is
lower than that in China, Cambodia, India, and Vietnam. Also, there are around 37 private and
public universities producing textile graduates in the country every year, further adding to the
skilled manpower for the segment. Moreover, favorable government policies, bank facilities (for
raw material purchase), and strengthening backward linkage supporting industries create a strong
case for the sector. Bangladesh enjoys duty-free access to around 52 countries, including
countries in the EU, the USA, Australia, Switzerland, Japan, Turkey, Russia, Norway, New
Zealand, China, South Korea, Thailand, Malaysia, and India, for the trade of many products. It
has attracted many major global retail brands, and with the technology and quality compliance
parameters has also seeped in Bangladesh’s apparel manufacturing systems. Moreover,
Bangladeshi manufacturers and exporters have built excellent vertical capacities, which only
China could offer before, which help global brands to ensure more transparency and coordination
in their supply chains.
Referencce: Review and outlook, 2020 Bangladesh garments and textile industry. (2020,
February 22). Textile News, Views & Articles. https://textilefocus.com/review-outlook-2020bangladesh-garments-textile-industry/